United Breweries Group is the holding company for United Spirits and Mallya’s other ventures such as Kingfisher beer and Kingfisher Airlines, which has been grounded since October as the company ran out of cash. It could not pay staff salaries nor ensure safety of its aircraft. The deal with Diageo was a desperate move to shore up some money, but it was hobbled by concerns over the rights of small shareholders.

Meanwhile, Kingfisher Airlines remains grounded. Last quarter, it reported no revenue at all and incurred even steeper losses. Meanwhile, United Spirits’ profits for the quarter soared 71%, while net sales grew by 11%. The beer division, with results due out tomorrow, has also traditionally been profitable.

In the flamboyant Mallya’s liquor empire, UK-based Diageo sees a chance to tap into an emerging market with a growing number of consumers of alcohol. Diageo acquired an initial 27.4% stake in November by buying Mallya and other promoters’ shares (along with an allotment of preferential stock) in United Spirits, the conglomerate’s liquor division. Because Diageo bought such a significant stake, it then had to give existing United Spirits investors the option to exit through an open offer in the stock exchange for 26% of the company’s shares at a prefixed price.

This agreement between Diageo and United Breweries raised eyebrows from regulators because of a “put” option, meaning United Breweries could then turn around and sell its remaining stake within seven years—at potential detriment to small shareholders.

For months, the Securities Exchange Board of India, better known as Sebi, has sought clarifications and assurances and amendments. It cleared the proposal on Jan. 31, but announced its decision today. If the open offer does not go through, Diageo’s original acquisition of 27.4% will be void and its only option would be to buy less than a 25% stake.

United Spirits stock rose 4% on today’s news. Diageo’s role in the deal as Mallya’s helpline is especially ironic given his ambitions, not so long ago, to become the world’s biggest spirit maker. In 2007, United Spirits purchased Scottish distiller Whyte and Mackay and took ownership of international brands including Vladivar Vodka, the Dalmore, Glayva and Whyte and Mackay Scotch. But while the alcohol division of Mallya’s company has been profitable, the airline known for fancy in-flight meals and great customer service bled money. Mallya started Kingfisher Airlines in 2005 as an 18th birthday present for his son.

The deal now awaits clearance from the fair trade regulator, the Competition Commission of India (CCI). Both UB Group and Diageo declined to comment on Sebi’s final clearance. But sources at the investment bank advising Diageo told Quartz that the open offer is ready to go and will hit the market as soon as CCI clearance is granted. “It will take less than 10 days from then,” this person close to the matter said, on condition of anonymity. “Hopefully market conditions will not be adverse.”